SQL Express works fine indeed - keep in mind that you have a limitation on the size (4 Gb if I remember correctly). But with good housekeeping a small-medium sized site should run fine on that. Epress lackx the SQL agent, so jobs should then always be "native" DNN jobs. I know some cases where I preferred using the SQL agent, but on a small site or medium sized business site that shouldn't happen I guess. SQL express also has limitation on the use of resources (e.g. a certain limit on memory usage, only one core at a time etc) - but I'm sure you'll never even feel that unless you start using some heavey DB stuff on your sites.
On the other hand, if you would use shared webhosting, many packages include the use of a SQL server (often with some restrictions on the size of the DB depending on the plan you pay for). If it's for a "localhost" situation, SQL express could indeed make your life free of paying for a SQL standard / enterprise license.
Most DNN developers use SQL express as their localhost test environment DB, by the way.
If you ever hit a problem and want to upgrade, that should always be possible (e.g. Express to Standard). You should even be able to move the database to a different server if needed (e.g. move from your local SQLExpress to a remote SQL server).
A good point here is that most of us actually use SQL Server Express for local sandboxes of our production sites (see numerous tutorials on how to move the data - generally by backup of SQL & restore on local SQL express + FTPing all files + changing connections strings to DB in web.config).